No. 28. 


PROCEEDINGS OF THE 
COUNCIL ON FOREIGN RELATIONS, INC. 


Mineral Resources and their Distribution 
as Affecting International Relations 





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CONFERENCE 

of the 

COUNCIL ON FOREIGN RELATIONS, INC. 

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Hotel Astor, New York City 
January 6, 1922 


SUBJECT: 

Mineral Resources and their Distribution as 
Affecting International Relations 


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Presiding 

HON. DAVID F. HOUSTON 

Speakers 

DR. GEORGE OTIS SMITH 

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Director, U. S. Geological Survey 

DR. J. E. SPURR 

President, Mining and Metalurgical Society of America 

DR. C. K. LEITH 

Geologist, University of Wisconsin 


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M*€~W X -r 







OFFICERS AND DIRECTORS 


President.JOHN W. DAVIS 

Vice President.PAUL D. CRAVATH 

Secretary and Treasurer.EDWIN F. GAY 

ISAIAH BOWMAN 
A. C. COOLIDGE 
NORMAN H. DAVIS 
STEPHEN P. DUGGAN 
JOHN H. FINLEY 
DAVID F. HOUSTON 
OTTO H. KAHN 
FRANK L. POLK 
W. R. SHEPHERD 
PAUL M. WARBURG 
GEORGE W. WICKERSHAM 


WILLIAM C. GRACE, 
General Manager, 

25 West 43rd St., New York City. 


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THE CHAIRMAN 



ENTLEMEN. I regret very much that Mr. E. F. Gay, who 
was to preside this evening, is laid up with a cold, and found 
it impossible to be here with us tonight. I regret his absence 
both for your sake and mine. Mr. Gay has had a deep 
interest for a long time in the discussion of the subject of this 
evening, and I want to tell you that he knows something about it. I 
think I wouldn’t miss the mark very far when I say that I am the most 
ignorant man I am personally acquainted with in the world when it 
comes to mineralogy and metallurgy, but perhaps my vacuum lets things 
of this sort pass through it more easily because we have experts here 
present tonight, people who know a vast deal about this and other sub¬ 
jects, and I want to say that even while they are speaking, if they don’t 
tell you what you would like to know about the subject, don’t hesitate 
to interrupt them and ask them about it. We don’t want them to get 
away from this room without telling us what we want to know, and it 
is a great pleasure for me to present to you as the first speaker an old 
friend and an associate of mine in Washington, a man who knows a 
very great deal about some things which I know a little something 
about, and a vast deal about many things about which I know nothing. 

I have the privilege of presenting to you Dr. George Otis Smith. 


DR. SMITH: Your Chairman has referred to the fact that there 
are some people in rather high circles that don’t know as much as they 
ought to about the subject of tonight’s discussion, and that is the reason 
that Professor Leith, representing the highest of all intellectual circles, 
our universities, Mr. Spurr, representing the next highest estate, that 
of journalism, and myself, a public servant, are here tonight to give 
you some idea of the things that we didn’t know so very long ago, 
because, as a matter of fact, and I think possibly that each of my 
friends has incorporated this into his remarks,—as a matter of fact, the 
Great War put mineral resources “on the map.” Many people discov¬ 
ered the importance of mineral resources, and on that account, being 
myself one of those who was converted to the idea, we want all that 
enthusiasm of first converts to our faith spread to other folks. We 
want to move the gospel along. 

Your chairman has mentioned the fact that I would be glad to be 
interrupted if there was any question that occurred to any of you that 

5 






I could throw some light on. That is true. But I also want to be inter¬ 
rupted if some of the experts, one of whom I see directly across the 
table from me,—if they discover my telling something that isn’t so. I 
want to be interrupted in the same way. 

The late Franklin K. Lane used a phrase to describe, and I believe 
it aptly describes, the importance of mineral resources, and that phrase 
I want to use as my text. He said that mineral resources are the 
‘‘foundations of power,” and he was using this phrase and this state¬ 
ment in a national sense. Now, the experience of the four years of our 
rapid adjustment to war conditions, as well as the experience of these 
latter years of all too slow adjustment to peace conditions, has o pene d 
our eyes to this fundamental relationship between mineral wealth and 
industrial prosperity. In view of the nation’s dependence upon indus¬ 
try and industry’s dependence upon raw materials, it is foolhardy not 
to take account of stock, or, to use an engineer’s phrase, not to examine 
the foundations of our national structure. 

In taking an inventory of our resources of mineral and raw materials, 
I would emphasize two facts that ought to be self-evident, but I fear 
they are not. First, the significant measure of mineral wealth is tons, 
not dollars. 1 Second, the true limit of mineral reserves is the rate of 
/ consumption. I know that in our annual compilations of statistics of 
mineral production that we put too much emphasis on the value of this 
year’s output as compared with the value of last year’s output. We 
have talked in terms of dollars, instead of talking in terms of tons. 

It is tons of metal or fuel that the mining industry delivers to the 
consumer of today, and it is tons of ore and coal and oil that remain 
beneath the surface available for future use. In the four decades that 
the United States Geological Survey has kept the records of the mining 
industry, the annual output has increased nearly seventeen-fold if valued 
in dollars, but about ten-fold if weighed in tons. This ten-fold increase 
is the truer gauge of the greater usefulness of the mining industry of 
today. Indeed, in our weekly report on coal production, and our monthly 
report on oil production, the dollar mark rarely appears. Tons of coal 
and barrels of oil are what count in turning the wheels of a nation’s in¬ 
dustry. The impressive totals of mineral output stated in dollars may 
not express accurately the measure of industrial advance. And I sup¬ 
pose I might go further and state what you men, experienced with our 
foreign trade, so well know, that there is a trade balance that needs to 
be figured in terms of tons, as well as a trade balance expressed in 
dollars. 


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This rapidly increasing rate of consumption of mineral raw mate¬ 
rials, even when expressed in tons, is the changing standard by which 
we must measure our unmined stores of mineral. We are giving more 
and more attention to make the best estimate that we can as to how 
much ore there is available of that metal or this metal, and how much 
coal or oil there is available for future use. But, the one thing that we 
must keep in mind, I believe, is, whether we can gauge them or not, 
are really limited more than by anything else, by this rapidly increasing 
rate of consumption. 

The bald statement that over 99% of our country’s original supply 
of coal is even yet unmined does not so truly tell the story as the fact 
that in these later years one bed of coal here in the East is contributing 
more than 20% of the output of coal, and of the easily mined and better 
quality in that bed fully one-third has already been taken from the 
ground. We can say—yes—three-quarters of one percent of the coal of 
the United States has been mined, but it is also true unfortunately that 
about 35% of the best of the Pittsburgh coal has been mined., More¬ 
over, this coal is being mined faster than ever before, and plainly at a 
pace that cannot be maintained forever. So it is that although we have 
an unrivaled supply of coal, our industries face the certainty of de¬ 
creasing quality and increasing cost, especially here in the East, of 
our fuel supply. 

Another measure of the rapidly increasing drafts that we are mak¬ 
ing on our mineral balances in nature’s treasury is afforded by the fact 
1 that in the last fifteen years we have mined and smelted more lead than'; 

in the nearly two centuries before, j I believe that the first reported out- 

* 

put of lead is in the year 1720, but in the last fifteen years we have mined 
much the larger part of the total from that date on. In the last thirteen 
years we have mined more coal, and in the last eleven years more iron 
ore than in the whole of the century and more before. In the last nine 
years, we have mined more copper than in the sixty-seven years before, 
and in the same nine years more zinc than in the fifty-four years since 
zinc mining began in the United States. Most thought provoking, how¬ 
ever, is the fact that our country has produced more petroleum since 
the outbreak of the World War than in all the years before August, 
1914. In terms of these seven and a half eventful years, American 
petroleum is truly a shrinking asset. There is another side to that but 
connected with that same statement, and that is the present over-devel¬ 
opment of certain parts of our mining industry,—the over-capacity of 
our mines. In the coal mines, the present capacity—and that is true both 
of mines, mine equipment, and of man equipment—our coal mines have 

7 


a productive capacity one-third larger than the peak production during 
the best year, during the war period, and their capacity is nearly double 
the output of the present year. I think you will admit that we have too 
many coal mines. With regard to copper, the copper mines,—of course, 
their capacity is approximately equal to their peak production, and five 
times the 1921 requirements. In the case of the iron mines, the mine 
capacity is equal, about equal to the blast furnace capacity, which is, 
as I understand it, about double the peak production, and is five times 
the output of this present year of industrial depression. 1 In zinc the 
. capacity is from twenty to forty percent above peak production, and 
three or four times the 1921 output. Other mines are well above the 
maximum requirements. That is the stage of over-development of our 
mining industry, which, in a way, affects, I believe, the working cost, 
the costs of production, for anything like a normal year, and further, it is 
a rather strong argument for our need, very great need, of an export 
market. -— 

Such is a glimpse of the background for any national or international 
mineral policy. Our country is blessed beyond all other countries in its 
abundance and variety of minerals. Yet, even the United States is not 
self-sufficient in minerals, nor is its supply inexhaustible. The world’s 
mineral resources differ from its food resources in this respect. A large 
expansion in the production of food stuffs is possible through both more 
extensive and more intensive use of agricultural lands, but it is only in 
the frontier countries and continents that we can expect mineral dis¬ 
coveries on a scale that will even begin to keep pace with the world’s 
increasing consumption. Both food supply and mineral supply will 
doubtless show apparent increase through greater conservation in both 
consumption and production, but here again the inventions and improve¬ 
ments devised by mining and metallurgical engineers can hardly equal 
the world’s ever-increasing requirements for mineral products. One way 
to express that increasing requirement of the world would be to com¬ 
pare the per capita consumption of the United States with that of the 
less progressive and more backward nations of the world, and just as 
civilization in these other countries approaches the civilization of some 
countries in Europe and of our own country, then there must be that 
increase in per capita consumption, and that is what makes up the ever 
increasing requirements of the principal, essential mineral products. 
Again this distinctive fact must be emphasized: Of minerals we have 
only one crop to harvest. 

Our own country being continent-wide in extent, we find a truly 
national vision difficult. A sign erected on a rich outcrop of ore, read- 


8 


ing “This is in the United States,” will not protect that deposit from the 
operation of natural and economic law—the limitations of distance and 
the cost of transportation—so that in reality the ore may be less acces¬ 
sible to our furnaces on the Atlantic seaboard than similar ore in 
another country. Our mines extend in an almost unbroken line across 
the continent. The Bureau of Mines recently gave out the statement 
that the centre of our mining industry is in Illinois, I believe either in 
Springfield, or some town south of Springfield, Illinois, figured, of 
course, upon the mining population. These mines in reality are quite 
evenly distributed throughout the United States, although so many of 
us think of the western states as the mining states. In consequence, the 
label “Mined in the United States” may involve considerable latitude 
and longitude in meaning. The result is that the long haul is distinctively 
an American problem. 

At various times we have figured the center of our mineral re¬ 
sources. Of coal, for instance, the center of the coal tonnage of the 
United States is down in southeastern Ohio. The center of coal pro¬ 
duction is in southeastern Ohio. ' However, the center of the coal de¬ 
posits is out in Nebraska. /The center of our petroleum resources is on 
the boundary line between New Mexico and Colorado. The center of 
our water power resources is also in much the same part of the country, 
up in Wyoming. We have never figured the center of our iron resources, 
but I suppose it would come somewhere near that center of the mining 
industry down in Illinois on a line not far from the line between 
Alabama and the Lake Superior region, unless we should give consider¬ 
able weight to some of the unworked far western deposits. Perhaps I 
also ought to mention, although it has a little political tinge in it,—per¬ 
haps I ought to mention an experience that I had last fall, when 
Assistant Secretary Vogelsang, wishing to prepare a speech on water 
power, and knowing that we had figured these various centers of re¬ 
sources, asked if we could tell him where the center of our water power 
resources was. He asked where was the center of demand for power. 
Secretary Lane had earlier made the statement that while seventy per¬ 
cent of the water power resources of the United States are west of the 
Mississippi River, seventy percent of the demand is east of the Missis¬ 
sippi River. The only way we knew of figuring the center of power 
demand, power consumption, in the United States, was to figure on the 
standard prime movers of the center of the horse power represented by 
those movers all over the country, and that would come at a point in 
Ohio. Well, I had found this center on a small scale map—this center 
in Ohio, and then I thought I would like to see what city was near 


9 



that. I didn’t recognize the locality on the large map, and I looked at 
a larger scale map, and I found that back in October of last year the 
indications were that the demand for power in the United States was 
centered right around Marion, Ohio. Of course, I wanted to play safe. 
You know, some years ago it was said in Washington that all govern¬ 
ment witnesses erected a fire escape before they made any definite 
statement. I wanted to play safe, and I told Secretary Vogelsang that 
that was the way we figured it just now, but perhaps a few weeks later 
we would go further south, but at that time Marion, Ohio, was the 
locus of the demand. So much for centers of resources. 

Even though we may be inclined to limit our view of the mineral 
problem to its domestic aspects, we soon discover that a national policy 
must include in its field of vision the international aspects. Even the 
United States, with its dominant position, is embarrassed in a way by 
uneven distribution of nature’s bounty. You will see how the resources 
both of power and of minerals are pretty well west of the Mississippi 
River. Our shortage in a few essential mineral commodities and our 
surplus in others makes exchange with foreign countries necessary, and 
it is also a business problem whether self-dependence in many other 
mineral products is desirable or profitable. Many factors that change 
with the stage of national development enter into this problem, such as 
the supply of capital, of labor, and of transportation available at the 
time and place. Each ore deposit has its own place in the world economy 
and therefore its own day for profitable exploitation. To learn all the 
facts and to weigh those facts accurately is of course the first step 
toward a wise mining policy and a safe business procedure. 

When we were preparing the facts for the Peace Conference, we 
drew up a rather significant set of statistics. When we compared United 
States resources with those of Germany, for instance, taking the five 
leading minerals, coal, iron, lead, copper and zinc, and added up the 
exportable surplus of each of those, we found a total surplus for those 
five for the United States of 24%, or an average of about 5%. Now, 
applying the same method to the coal production for the year 1913, the 
coal production, the iron production, copper, lead and zinc production of 
Germany, we found a total deficit there of 40%. Now, I think that is 
a fair kind of a measure of the difference between the United States, as 
an industrial nation, self-sufficient in raw materials, as compared with 
a nation like Germany. 

In studying mineral resources, then, we can not avoid the world 
view. Whether we call ourselves nationalists or internationalists, in 
practical effect the world’s resources of coal, of oil, of copper, of iron, 


10 




of potash, of platinum, will be pooled, and the currents of international 
exchange will flow where they are guided by the trade winds of supply 
and demand. How much stronger those currents have become may be 
seen in the fact that since I studied political economy and commercial 
geography, our exports have doubled in volume, and this increase has 
been made in other than agricultural products, for the output of our 
mines and of our wells, our smelters and of our furnaces, make up the 
larger part of our increased contribution to the world’s trade. And this 
growth of international exchange ought to bring the nations of the 
world closer together. For example, our trade with Mexico is a tie that 
must eventually bind the two nations on better terms, for I believe 
three-fourths of Mexico’s imports are sent from the United States, and 
four-fifths of Mexico’s exports come to us. 

j-- 

It has been said that coal and politics cannot be treated separately 
in Central Europe, and so today it is hard to think separately of inter¬ 
national relations and petroleum. Yet I have suggested elsewhere that 
petroleum yields not only explosive fuel but also illuminants and lub¬ 
ricants—more light and less friction in the world—so that perhaps 
petroleum may better be associated with the idea of commercial peace. 

Whenever I try to catch a glimpse of America’s future place among 
the nations of the world, I think of minerals as the raw material upon 
which capital and labor work together in fashioning products to meet 
the world’s need. Our supply of energy with which to strengthen the 
arm of human labor is larger than that of any other country. A 
recent inventory of the water power resources of the world, in fact, 
an inventory that was started for the Paris conference but since brought 
up to date and just published last week, shows that 41% of the water 
power that has been developed for the use of man is in the United 
States. A state like New York is comparable to the largest nations of 
Europe in that respect. I think that New York has more developed 
water power than any nation in Europe, and altogether, 41% of the 
world’s water power that is being used, is developed here in the United 
States, and of course, Canada. Probably, among all of the other 
countries, Canada leads. So, North America is far ahead of any other 
continent in this respect. Now, of the other two great sources of energy, 
coal and petroleum, I just saw in a magazine a statement by Wells in 
which he refers to coal as the key to metallurgy, and petroleum is the 
key to transit. I think that is rather a good expression of the difference 
between the two, although both are great sources of power. These 
other great sources, coal and petroleum, in these the United States has 
an even larger development to its credit as compared with the other 


11 



nations, so that our industrial plants and our transportation systems 
are equipped with power to an extent possible nowhere else in the 
world. I don’t know as I ought to say that you gentlemen don’t realize 
it, because from the number of experts I see gathered around me you 
undoubtedly do, but I can say for myself that a few years ago I didn’t 
realize these outstanding differences between the American workman 
and the English or German or any other workman in the world,—the 
fact that our workman is backed up with at least twice as much horse¬ 
power as the workman of any other nation in the world. We even go 

f t 

further. Of course, in our big steel mills we will find ten, something 
like ten horsepower behind each workman. It is either ten or twelve, 
and something that interested me when I was looking into some of 
these figures when I was getting figures for my very simple investiga¬ 
tion of the Steel Corporation, I noted that at the time of maximum, of 
peak production, that the motors seemed to take more than their share 
of the increased load, in that the number of horsepower per man 
power, the ratio, increased.; In other words, in time of need, the machine 
came to the aid of the human workmen as in no other country in the 
world. That is the kind of thing, Gentlemen, that makes America great. 
My eyes were opened on this subject by a book written by two English¬ 
men, not Americans, Englishmen, which had the significant title “Col¬ 
lapse or Empire.” Their thesis was that if England didn’t wake up and 
equip their workmen with machinery, as we are equipped over here, 
and they gave many statistics, such statistics, in fact, if I would repeat 
them to you as my own you would say that it was the typical pride 
and boastfulness and arrogance of an American trying to show off, 
but, as a matter of fact, these were statistics cited by patriotic English¬ 
men, showing the greater productivity of our workmen over their 
workmen, which was two, three or four-fold in some instances, was 
due to the fact that the American workman had two or three or four 
times as many horsepower backing him up. I wish I could emphasize 
the fact with all the power that is within me, that our industrial system, 
our transportation system, are equipped with power to an extent pos¬ 
sible nowhere else in the world, and we are glad, on that account, that 
we still have 99^4% of our coal still left in the ground. An abundance 
of cheap power means high productivity for labor, the possibility of 
low costs and high wages, and the promise of industrial progress and 
national prosperity. 

I think that one of the best things that has come to my attention 
as indicating the influence upon wages was that at the General Electric 
Works in Pittsfield, Massachusetts, where one man was attending to 


12 




a number, I think it was 5 automatic lathes, and I asked the superin¬ 
tendent how much power was represented there, and he said that man 
was using 15 horsepower. Now, the amount of work that that man 
was turning out was so great, as compared with the work that would 
be turned out by any other laborer, that his wages in terms of the unit 
article that he was turning out, were rather insignificant. It would be 
rot to say that because that article was selling for a little less that you 
have got to cut his wages 33 1/3%. It was the machine that was doing 
the work, and the man was simply guiding it. 

An abundance of cheap power means high productivity for labor, 
the possibility of low costs and high wages, and the promise of indus¬ 
trial progress and national prosperity. Such a view of our immediate 
future is warranted by the facts of our national resources, but our 
outlook must necessarily be broad enough to include the whole world. 
The greater our industrial development the greater need we will find 
for foreign sources of raw materials and for foreign markets in which 
to sell our products. American capital must realize its obligation to 
insure the future by reaching out into other lands for the commercial 
control of both mines and markets. Unfortunately, there is a large 
group of our citizens that don’t put a premium upon that kind of 
financing, but would go to the other extreme. One of them, who is 
rather high in our national councils, told me that an American dollar 
invested abroad ceases to be an American dollar. It loses its national¬ 
ity. Well, as we look out into the future, and think of the need of larger 
supplies, and we think of the need of larger markets, we can hardly base 
a very progressive program upon that kind of a sentiment. Of course, 
that is not true. 

That type of pioneering may be not only peaceful—with our capital 
and with our engineering talents—but, indeed, it will be helpful to the 
peoples of the frontier countries. Already the day is arrived when no 
nation can live unto itself. 

THE CHAIRMAN: Gentlemen, I have very great pleasure in 
presenting as the next speaker, Dr. J. E. Spurr, the President of the 
Mining and Metallurgical Society of America. 

DR. SPURR: The origin of this meeting runs back a long dis¬ 
tance, but immediately it arose in the meeting of the Metallurgical 
Society of America, in which a Committee of the Society, called the 
Committee on Foreign and Domestic Mining Policy, made its report. 
Dr. Leith, who will speak after myself, was the Chairman of the 
Committee, and Mr. Manning, Mr. Smith, Mr. Beach, Mr. Ball and 


13 


Mr. Begg were the other members of the Committee. All of them 
are here tonight except Mr. Begg and Mr. Ball and Mr. Beach. Mr. 
Beach should have been here. And when the report of that Com¬ 
mittee was printed and submitted to the Society, there followed a 
very active discussion, and knowing the interest of Mr. Gay in the 
subject, with whom we also had all worked very closely in the mat¬ 
ter, he was invited to be present, and he expressed himself as being 
so much interested that he wanted to put us in touch with the Council 
on Foreign Relations. 

We mining engineers and geologists have a message to our mining 
industry; to the thinkers of the country outside the profession; to the 
public and to our government. How best shall we put it? How phrase 
and punctuate it, that we may impart our own conception to such a 
nucleus of keymen as we have here tonight? How to avoid saying 
things you know; how to make clear points of which you may not 
have realized the significance. 

My first point is something you all know, but I shall beg leave 
to stress it as part of my whole picture. Our modern civilization is 
essentially a machine-made civilization, brought about by and dependent 
upon mechanical inventions,—the railroad, the printing press, the tele¬ 
graph, the steamship, the electric motor, the harvester, the sewing 
machine, the complicated machines of the factories, the automobile, 
and the rest. Without these contrivances, the growth of Occidental 
civilization, which is signalized by control over natural forces and by 
previously unheard-of average comfort and luxury, would not have 
come to pass. 

My second point is to ask you to consider out of what we must 
construct these machines, what raw materials, as the favorite phrase 
puts it, we need for our cunning structures. Out of supplies of vege¬ 
table and mineral origin—out of rubber, cotton, wood, stone and the 
metals. But, primarily out of the metals. 

Now, I am going down this list like an old-fashioned preacher 
from firstly to sixthly and lastly. So thirdly, I will ask you to consider 
that besides the metals which we build into our machines and which we 
dig as minerals out of the earth, we dig other minerals which furnish 
most of the power to drive these machines—what we call the energy 
or fuel minerals, coal and oil. 

Fourthly, I would call your attention to the fact that of our raw 
materials, those of vegetable origin, like cotton, rubber, or even wood, 
grow, and grow again. The number of crops, looking forward, is 
innumerable. And I will sharply contrast to that the minerals, whether 
metals or fuel minerals, or what-not. They do not grow. For every 

14 


ton you take out of the earth, your storehouse contains one ton less, 
and not all the cultivation and propagation of science shall be able to 
restore that vanished ton. Therefore, the current phrase that the 
mining industry is a wasting industry. 

Fifth, it must be clearly understood that the metallic and other 
minerals were not uniformly distributed over the earth in the be¬ 
ginning, but more or less segregated into spots or areas, or what we 
call metallographic provinces. These areas differ for every metal. 
Therefore, the distribution of mineral wealth does not coincide with 
national boundaries, nor has the supply in a certain region any rela¬ 
tion to human need. Nickel, for example, occurs, practically speaking, 
about four-fifths in Canada, and one-fifth in New Caledonia, and the 
rest of the world has very little. 

Sixth, that what an actively industrial country does not possess 
in the way of metallic resources she must acquire in trade or conquest. 
Thus, we must get by trade our entire stock of nickel, platinum and 
tin, and in a large measure we must thus acquire many other metallic 
raw materials and other minerals, like quicksilver, antimony, tungsten, 
potash and nitrates. There is no other way. We cannot transplant 
or cultivate the metals or minerals. 

Seventh, that the industrial activity, the metal consuming activity 
of the immediate past, present and immediate future, is a new factor. 
History affords us no precedent. There has been more production and 
consumption of the metals in the last twenty-five or fifty years than 
in the whole previous history of the world. The per capita consump¬ 
tion of mineral wealth in the United States has multiplied ten times 
in the period since the Civil War. The world’s output of petroleum 
since the beginning of the world war has been greater than that of all 
the preceding history of the world. The mineral output of the United 
States in 1880 was the same as that of Oklahoma in 1920. 

Eighth, that under the existing industrial consumption of mineral 
wealth, which will be enormously increased if backward nations adopt 
our industrial life, the mineral reserves of the world are susceptible 
of exhaustion. That they occur in definite and limited quantities; 
that when they are gone there will be no more, and that substitutes 
will have to be gradually introduced and a constantly modified type of 
civilization supervene. 

Ninth, that the United States is the richest mineral country in the 
world, and that the British Empire is a close second. This fact has 
made us self-satisfied as to the future, basing our judgment on the 
past. Who would be a bear on the United States? He is hard to find. 

15 


But, what are the facts? What are the estimates of experts, which 
are becoming more and more reliable as approximate bases for policy? 

Petroleum is the key mineral of the present, for it makes possible 
automobiles, airplanes, and petroleum-burning navies. It is hardly too 
much to say that other things being equal, the great nation that con¬ 
trols petroleum may, if she will, control the world. The United States 
produced seventy-one percent of the world’s petroleum in 1917, and 
therefore, our British friends point out that we have no cause for 
national alarm over the British policy of accumulating oil supplies 
w r herever possible in the world. Our British friends, being experts, 
know better than that. They know what our own experts know— 
that we are burning our candle at both ends. According to a fore¬ 
cast made by the United States Geological Survey, the oil reserves 
of the United States would supply the country, at its present rate of 
consumption, for only about eighteen years. But as to the rest of the 
world, although it produces only a third of the oil that America does, 
it uses only about a fourth of the total world’s annual production; and 
it probably possesses reserves large enough of oil to last, at the present 
rate of consumption, for perhaps two centuries^ So that you may 
figure for yourself in what position we shall be in twenty-five or fifty 
years, and all the soothing explanations of Sir Auckland Geddes or 
Sir John Cadman explaining how rich America is in petroleum as 
proved by her vast current production will not comfort us much then. 
You know what eventually happens to the young man that inherits 
great wealth, and is a spendthrift with it. You know that eventually 
he must depend on his poorer relations for support. The point is 
that like the turkeys in the barnyard who do not believe in the legend 
of Thanksgiving Day, we assume that our mineral wealth is as inex¬ 
haustible as our future supplies of wheat and hogs. Who are these 
bespectacled, unpractical geologists anyhow, with their talk about 
exhausting our mineral supplies? “I have lived in the United States” 
observes the average citizen, “for fifty years, and we are continually 
finding new reserves of mineral wealth. We have more now than in 
the time of my father, and there was more then than in the time of 
my grandfather. Trust American grit and ingenuity to keep up the 
ratio.” Well, there is no doubt, to paraphrase Kipling, that we are 
a great people. But, we are great for two reasons: One, I believe, 
from the character of the stock of the original founders of the colonies 
and the republic, and the other, for the vast untouched natural wealth 
they found here, especially the mineral wealth. It has taken the con¬ 
junction of the two to make America of today. But, as the ancient 
Israelites observed to the ancient Egyptians, no matter how good a 



16 



brickmaker you may be, you cannot make bricks without straw. This 
quotation is not so apt as it would be if it had not become known that 
we can make bricks without straw, but it meant a modified civilization, 
and although we hope some day to be able to run automobiles without 
gasolene, at least we shall have difficulty, I fear, in running a petroleum¬ 
burning navy on an artificial fuel. 

The fuel minerals—petroleum, natural gas, and coal—are the most 
easily destructible of our mineral wealth. You have heard of the Iron 
Age, the Stone Age, the Bronze Age. Historians a few centuries 
hence, will designate our age, the Age of Petroleum, and it will be 
only a legend. Unlike the metals which may be conserved and re¬ 
worked, petroleum, the most evanescent of our mineral treasures, 
flares up once and is gone forever. 

Tenth, I do not wish to dwell widely upon petroleum, although 
it is the most insistent problem. All our mineral supplies are im¬ 
portant problems. A member of the United States Geological Survey 
has estimated that our quicksilver supplies, if entirely exhausted and 
used exclusive of imports, might last the country for ten years. A 
competent man in the metal trades has made me the estimate that 
our chromite supplies might supply our whole needs for three years. 
And so on. On the other hand, we are very rich in certain mineral 
supplies. We are the richest country in the world in coal and iron, 
copper, lead, zinc, and other minerals. 

The United States is credited with practically half of the world’s 
supply of coal. At our present rate of production, our coal will last 
for many centuries, or even thousands of years. It has the longest 
life, perhaps, of any of our mineral supplies. It is true that the highest 
grades will be exhausted first. G. S. Rice, of the United States Bureau 
of Mines, writes: 

“It has been estimated that the output of American anthracite will 
seriously decline in sixty to one hundred years. Probably this will 
result in a change of practice, the use of coke, and other methods of 
house heating. If the rate of production continues to increase, high- 
grade American steam coal will probably be exhausted in a little over 
one hundred and fifty years. American coking coal of the best Con- 
nellsville quality is of equally short duration.’’ Our coal situation, 
therefore, and indeed that of the world, is relatively quite satisfactory. 

As to iron, the United States produces more than one-third of the 
world’s output, and most of the United States output comes from the 
Lake Superior District. There is one other iron field in the world 
which produces nearly as much. I wonder how many of you know 

17 


what it is. It is in Alsace Lorraine, which normally produces one- 
fourth of the world’s production, or nearly as much as the Lake 
Superior district. And I wonder how many comprehend what this 
means—that the struggle between France and Germany has not been 
for territory, or language, or sentiment, or patriotism, or poetry, but 
a fight over the richest storehouse of iron and coal in Europe; a con¬ 
test for the nourishers of the life-blood of great industrial nations. 
This is an outstanding example of the fact that the most potent cause 
of political disputes and wars is the unequal distribution by nature of 
our mineral supplies. I do not think it too much to say that we also 
fought the World War over these mineral deposits which lie in Bel¬ 
gium, Luxembourg and Alsace Lorraine. 

The iron ore reserves of the United States, like the coal reserves, 
are sufficient to last for many centuries. From a standpoint of govern¬ 
ment policy, we can treat them almost as an inexhaustible supply. It 
is true that reserves of high-grade ores are being gradually depleted; 
and it is predicted that high-grade foreign ores, such as those in Brazil, 
will find an increasing American market. 

Coal and iron are the backbone of our industrialism, and we have 
small need to worry about them. What about copper? The United 
States produced in 1917, sixty percent of the total world output of 
copper, and American capital controls eighty percent of the world’s 
production. While the United States produces more oil, iron and 
copper, than any other country, it is only in copper and oil that the 
output is greater than that of all other countries together. This means, 
of course, that we mine copper not only for ourselves but largely for 
the world. We normally export about fifty percent of our production. 

The total output of the copper prduction of the United States 
reached a maximum of nearly two billion pounds in 1916, but only stood 
at the very low figure of about half a billion pounds in 1921. 

What about our copper reserves? These have been estimated by 
F. W. Paine, in “Political and Commercial Geology.” 

A large part of our production comes from the group of mines 
called the porphyries, which are masses of low-grade copper-bearing 
rock, lying close to the surface, and which have usually been quite 
accurately measured by drilling. The six largest of these, the Utah, 
Ray Consolidated, Chino, Inspiration, Nevada Consolidated, and Miami, 
are credited with reserves of about 620,000,000 tons, yielding a recovery 
of about one percent copper of a total reserve of over twelve billion 
pounds. These porphyries have normally contributed in recent years 
thirty-five percent of the total copper output. 


18 



At their average rate of production, Mr. Paine estimates that the 
known porphyry copper mines of the United States would be exhausted 
in some twenty-six years. There are none which have an indicated life 
of more than thirty years. As for the deep copper mines, we know 
that those of the Lake Superior region have become continually lower 
in grade and more difficult to mine. These produced in 1917 something 
like one-eighth of the total production of the country. And we know 
that the other deep mines, although they may have large ore reserves, 
are not inexhaustible. Mr. Paine sums up the matter as follows: 

“The known ore reserves serve as a basis for the assumption that 
the production of copper will continue at the present figures for at least 
ten years.” Not entirely a problem for posterity, as you will see. Even 
the proponents of the question: “What has posterity done for us?” will 
find that they should interest themselves in our mineral supply prob 
lems and policies. 

There will be no advantage in my citing the comparative situation 
of other metals and minerals. By these examples, ranging all the way 
from our abundant coal and iron, to our practically entirely lacking tin 
and nickel, and touching upon others that we have in greater or less 
abundance, but with a limited life, I have, I think, made it clear that 
each mineral industry is a separate problem. Moreover, that we need 
a full understanding of each, and that we should have a corresponding 
national policy for each, in the light of established facts. 

Eleventh: What should we have as a policy or policies? Should 
we not take an inventory of our approximate stock in trade of each 
mineral commodity, that inventory roughly setting forth all we shall 
ever have within our national boundaries, and frame up for each min¬ 
eral or metal a separate policy based upon our supplies, our consump¬ 
tion, and the needs of the rest of the world? Should not these policies 
determine our governmental acts touching these mineral supplies? 

I take it for granted that the national welfare rather than the 
interests of a small group should dictate governmental policies; that 
we should not put a tariff on chromite, for example, to enrich a small 
group of owners of chromite claims, if such an action would result in 
a net disadvantage to the country, either by heightening the average 
cost of living through indirect channels, or because we should not en¬ 
tirely exhaust our chromite, but keep some stock of that important 
steel alloy in reserve for emergencies. 

It is not so much a question of conservation that we have to deal 
with as efficient management of what nature has left with us. We 
should not strip the cupboard bare of any essential raw materials; and 
most of these metals are absolutely essential. 


19 



I do not know whether it is too optimistic to hope that our gov¬ 
ernment will not adopt mineral policies favoring the mining under 
artificially forced draft of essential minerals of which we have a poor 
grade and scanty supply, at the expense of the best solution of the 
big and far-looking national problem. Yet a tariff was sought, but not 
obtained, even on tin ore. As a matter of fact, national measures are 
often taken which work in favor of a less group than that represented 
by a small mining industry; for many of the proposed mineral tariffs 
in the pending tariff bill will each practically operate principally or 
entirely to the benefit of a single company; and the nation at large will 
pay the bill. 

Twelfth: How shall we go about it further? The basic findings 
of those who have studied this problem are set forth in the first report 
of a committee on foreign and domestic mining policy of the Mining 
and Metallurgical Society of America, of which committee Dr. Leith 
is chairman. He will speak concerning this report tonight. Briefly, 
the report groups our minerals and metals into four groups: Those of 
which we possess a surplus; those of which we have enough for our own 
use; those of which we have some supplies, but not enough for our 
own use; and finally, those minerals that we lack almost entirely. 

The committee naturally questions the advisability of imposing 
tariffs on those minerals of which we have an insufficient supply. 

One basic principle, covering the whole world, the committee de- 

* * 

dares for. It says: Any restrictions, national or international, which 
interfere with the necessary searching of the earth are in principle 
undesirable. 

And this reminds me of the resolution adopted by the International 
Chamber of Commerce last year, regarding the international movement 
in minerals. A resolution was adopted, which dodged the delicate 
question of import duties, but was able to secure the approval of the 
delegates of all the countries as regards export duties, and it accord¬ 
ingly recommended the abolition of export taxes by every government 
for a fundamental list of raw materials including “ores and mineral 
products; natural metals; precious metals; mercury; stone and earth; 
coal; and mineral oils.” Certainly the mineral industry is sufficiently 
blanketed in this list. But, it is the wording of the preamble which is 
of greatest interest to us, and it reads as follows: 

“Considering that every tax on export of raw materials must neces¬ 
sarily increase the cost of production and thereby hinder economic 
development and prevent economic restoration; 

“And that it is desirable to put a stop to, as far as possible, the 
rivalries between nations in their search for raw materials, to stamp 

20 


out the cause of economic conflicts which may threaten peace, and to 
do away with the natural inequality arising from the fact that the 
riches of the world are unequally spread over its surface and to assure 
the rapid restoration of the world’s commerce.” 

This was, in effect, like the Mining and Metallurgical Society com¬ 
mittee’s statement regarding exploration, the attempted setting up of a 
principle of international or world right or equality. It affirmed that 
countries that possessed raw mineral wealth, but could not use, had no 
right to tax unduly the industrial nations which must have this raw 
material. Thus, Chile would have no right to hold up the industries 
of the world for her nitrates, nor Mexico for her petroleum, nor the 
Republic of Georgia for her manganese. 

I am not necessarily quoting this resolution of the International 

—\ 

Chamber of Commerce as my own opinion; but only to show the grow¬ 
ing thought that the chance distribution of mineral deposits within 
certain political boundaries does not carry an altogether exclusive 
ownership; but that the whole world has some lien on these mineral 
deposits. Certainly, the acknowledgment of such a principle of free 
egress would save political troubles and wars. And in debate, the 
International Chamber of Commerce went further and debated—but 
took no action—on the idea that raw materials, like mineral supplies, 
should not only have free exit but also free entrance, and that pro¬ 
tective tariffs should be confined to manufactured products. I leave 
that with you to consider. It is another assertion of equality of oppor¬ 
tunity for the use of nature-made raw materials, while the granting 
the need of more complex competition for the work of men’s hands. 

Thirteenth—and this is the last; I shan’t have a fourteenth point: 
Events have already outstripped our implied prophesy as to the future 
inadequacy of our supplies of some minerals. American interests, find¬ 
ing their efforts in this country already circumscribed, have reached out 
and own, control and mine an ever-increasing amount of copper, iron, 
tin, petroleum and other materials outside of our borders. England’s 
mining empire is the world; we cannot conceive of England building a 
wall against the carriage of her mineral raw materials from her far- 
flung empire to her factories. It would be suicidal. We are pushing 
out along the same lines, but with a far, far greater reserve of supplies 
at home. Nevertheless, when it comes to government policy, where 
are the limits which we shall draw, within which we shall say we wish 
to favor, to protect, to encourage? Years ago we should have said 
that these limits lay between the Atlantic and the Pacific, between the 
Great Lakes and the Rio Grande. But, we have reciprocity with Cuba 
and the Philippines, and a Republican Administration sought reci- 

' 21 



procity with Canada. Does this not indicate that the entity or domain 
we wish to protect lies within our commercial boundaries, not our 


political limits? And if so, should we consider as part of our national 


problem the great American copper industry of South America, or the 
American oil industry establishing itself in Palestine? 

So much for our own commercial empire. But when we consider 
the sober Republican principle of reciprocity, where shall we set the 
boundaries? One thing is certain: We should have had no United 
States of America if we had custom houses on the borders of each 
state. We represent primarily a commercial union, and we shall have 
no lasting friendship between nations, and no world peace, while we 
have commercial struggles between great nations, discriminations and 
recriminations. Only one kind of entente or alliance can eventually 
survive—the commercial alliance. 


THE CHAIRMAN: Gentlemen, I have the pleasure of present¬ 
ing as the last speaker Professor Leith of the University of Wisconsin. 

DR. C. K. LEITH: Mr. Chairman and Gentlemen: The hour is 
getting late, and I shall make my remarks brief and merely supple¬ 
mental to what has preceded. I shall confine my statements to more 
or less trying to outline a program of internationally handling the 
mineral situation of the world. The previous speakers have stressed 
the recent condition of the mineral industry; the great acceleration of 
its production; the fact that the world is using these minerals on a 
very large scale, probably as much from 1900 down to date as in all 
preceding history. They used to be taken out of the ground and used 
almost casually, but the transportation and the use of minerals in any 
broad, modern sense is a very recent thing. We are conducting in a 
sense a gigantic experiment, and we see problems coming up because 
it is a new thing that we haven’t heretofore had to deal with. 

One illustration I might add to what has already been given, and 
that is, the great acceleration in the use of energy resources, which 
has already been mentioned. Somebody was apt enough to put that 
in terms of man-power, and this is what it comes to: In 1890 in this” 
country every man, woman and child had potentially control of seven 
able-bodied men, while today every man, woman and child in 



country has potential control over thirty able-bodied people, j We have 
released a tremendous amount of energy, and I sometimes think of 
this tremendous development and compare ourselves to the tail end of 
a kite, and gradually working up. 

Governments have always been interested in mineral resources, but 
the attention of governments has been extending to a great variety of 


22 



minerals. They are becoming interested and very closely interested— 
commercially interested. They are getting into the game themselves 
on a big scale, where comparatively only a few years ago the mineral 
field was an open field for anyone to get into. Now we find that 
governments are competing directly for oil, copper, iron, nickel, and 
so on, through controlling companies in certain regions of the earth— 
of the German type that we know of./ It is becoming keen, and there 
are troubles before us now as there have been in the past. A number 
of illustrations have been given of the difficulties of the past in Alsace 
Lorraine. One of the great pre-war difficulties was the German am¬ 
bition to control iron ores, leading to trouble with France and America. 
Some of the diplomatic steps taken before the war related to certain 
deposits of copper in Europe. At the present time we see the world 
bristling with problems of that sort. The real basis of the Japanese 
resistance in Shantung is the iron ores and coal deposits that they 
require and feel they must have of the western coal reserves of China. 
The coal of Silesia is another thorn in the side. You might go on 
almost indefinitely to indicate the problems that are bothing our State 
Department and the state departments of the various countries. _ 

We have begun to ask ourselves what kind of a policy we should 
or can adopt; whether any general world policy is possible in this 
great scramble for the natural resources of the world, due to this recog¬ 
nition of the fundamental importance of natural resources, and as Dr. 
Smith and Dr. Spurr have already pointed out to you, it has occurred 
to us mining men that one collateral fact in an analysis of this subject 
we can put forward and emphasize, and that is the natural destruction 
that is continually going on of these important commodities. 

Now, we have to deal with something like a hundred different 
mineral commodities, but for every one of those commodities there are 
practically only very few channels of distribution marked out by nature. 
They are not hard to get hold of. They are easily ascertained. We 
did not know them in this country before the war, but we are beginning 
to see that after all there is a definite pattern in the world distribution 
of minerals. We know that manganese comes from only three places 
in the world. Chromite comes from only one place in the world. 
Nickel likewise comes practically from one place, and the channels of 
movement of all of these minerals are well known, and are more clearly 
apparent every day. Our emphasis is simply on the fact of natural 
distribution of minerals, and the limitation of the sources of supply, 
and the consequent necessity, if the world is to develop evenly, for the 
movement of these minerals beyond international boundaries. 

Gentlemen, it isn’t a situation that we can change by legislation. 
We can modify these channels. We can expand them, but eventually 



23 



we cannot change them, and we simply ask for the recognition of these 
fundamental facts, and are now trying to put forward some of these 
fundamental facts before you and similar organizations. We in this 
country, I think, have been behind in the recognition of a few of the 
simple facts. During the war some of us—and following the war as 
well—were very much impressed with the knowledge of that subject 
possessed not only by mineral men in England, but by statesmen and 
by men in charge of consular offices. Members of the British Embassy 
in Washington, in no touch whatever with the progressive study of 
mineralogy, and so on, had a list of fifteen or twenty minerals on their 
finger tips of which they knew all about. They knew exactly where 
England stood with regard to potash, iron, etc. It wasn’t simply a 
case of a lesson learned casually. It was a fundamental matter to which 
they were giving thought. They were recognizing the facts of the 
situation. We are not, perhaps, in a position yet to state the facts 
exactly as we would like to, but we do know with reasonable certainty 
that in this country we have certain minerals available for export in 
large quantity. We also have those minerals in this country in which 
we are fundamentally deficient, and will probably always remain so. 
One of the strong points of our industrial system is the steel on which 
it is based, and yet the ferro-alloids that go into the making of the steel 
and without which chrome-steel cannot be made, do not exist in this 
country. We are absolutely dependent on the rest of the world for 
our sources of supply in that field. It isn’t difficult to point out where 
those sources of supply may be found, and without asking for any 
foreign policy of acquisition by force or anything of that character, we 
are simply asking for a recognition of this fact, and the building of a 
certain policy around this natural distribution of minerals. 

Now, we have attempted to name and classify the minerals of the 
United States, and specifically we have classified a hundred or more— 
slightly more—varieties of minerals, and here is a large group of 
minerals where the supply is just about enough to balance our needs. 
Then of certain other minerals we have more of those than we want, 
and so on. The specific feature of this situation that we want to call 
attention to is that class of minerals in which we are fundamentally 
deficient. Now, how worse than foolish it is to put a tariff on that 
class of commodity—that which we need so much. Of course, one 
way to put our hands on those minerals of which we are fundamentally 
deficient is by the process of war, but I believe we can disregard that 
without any discussion. It is very difficult, I imagine, for anybody 
outside the mineral industry to get any accurate perspective of that 


24 


s. 

i-T 


question, and it has seemed to us that we might get together and 
present a few of these simple facts. 

I would emphasize, then, almost solely that question of natural 
distribution. ' Through no method can we put into the earth those 
minerals which are not there in the first place. ' We must remember 
that. /Then, the formulation and building up of an economic policy 
around these great trade channels which are now so thoroughly estab¬ 
lished. r 

Now, then, we have suggested that with these facts before us— 
and they are now before only a comparatively small group. We would 
like a larger group and particularly our government to come in and 
realize them also—I say we have suggested that fundamental interna¬ 
tional policies might be adopted, not only by our own government, but 
by other governments and other countries. 1 It certainly ought to be 
easy to get recognition of these fundamental facts in all governments. 
As a matter of fact, they are recognized in most every other govern¬ 
ment but our own. [ We ought to get the affirmative declaration by all ! 
governments of the necessity of keeping those main trade channels 
open, and they can be specified and named. There are only a very 
limited number of them. It certainly ought to be possible to get an 
affirmative declaration on the question of the freedom of exploration. 
Mineral resources are limited. They are wasting assets, and explora¬ 
tion and development are constantly necessary in order to replenish 
our rapidly depleting reserves. Not only are we concerned in such 
a movement, but all other nations on the face of the earth as well. It 
is common to the world, and in that field of exploration in backward 
countries lies a great deal of the international difficulties today, because 
of the desire of one nation to get ahead of another through the limitation 
of concessions in those backward nations, sometimes through limita¬ 
tion of all sorts which often bring up problems of very serious difficulty. 
Our State Department today is cluttered up with problems of that sort 
where American capital, trying to get into a field, finds these limita¬ 
tions, and complaints are consequently made to our State Department. 
On the other hand, we are limiting the field here of other nationals,— 
or at least are charged with so doing. w ___ 

We suggest also the right of stronger governments to bring pres¬ 
sure upon weaker governments in the interest of developing minerals 
which the world needs. Now of course I realize that we are getting 
into deep water here, where there may be great differences of opinion. 
There may be a hypothetical case where some backward nation pos¬ 
sesses something which is badly needed by the rest of the world for 
the development of civilization, it may be an ethical question whether 


25 


that country has the right to stop its development, but regardless of 
the ethics of the situation, I am assuming that the pressure is going to 
be exerted. If all the oil in existence should be located in Mexico, and 
Mexico should be backward in developing her oil fields, we are not 
going to stop riding in automobiles. I don’t mean to make the broad, 
general statement that it would be right under all circumstances to 
bring pressure to bear on the Mexican government. All I say is that 
as long as the demand for oil or any of the energies based upon oil 
continues, and as long as there is that energy in Mexico, Mexico should 
not be in a position to halt the progress of the world in that respect. 
We recognize the existence of that sort of pressure, and its probable 
continuance, and we believe that that pressure is desirable for the good 
of the world as a whole. We would lay our stress solely on the man¬ 
ner in which this pressure is applied, and we suggest that in mandatory 
countries of this nature—and I believe that that was considered at the 
Peace Conference—development and exploration should be done by the 
country controlling the local situation, and it should be done in the 
interests of all. It should be an open door; that exclusive conditions 
should not be made. No bargain should be made with any one country, 
or any two countries, or any combination of countries for the devel¬ 
opment of any resources which should exclude others in that particular 
field, because in just that kind of thing lies not only the difficulty coming 
from jealousy and animosity, but there also comes the danger arising 
from the exploitation of another country by some single strong country 
not using the best methods and not having those methods open to 
publicity and not under the control of the group of nations as a whole. 

We suggest also the right of nations to insist upon a certain amount 
of the smelting arsenals within their own boundaries. It isn’t eco¬ 
nomical, it isn’t beneficial to all the people to ship certain material 
over great distances of the earth. Where it is possible to smelt them 
locally, it seems sound that the country possessing the minerals to get 
the advantage of the industry based upon the smelting. There are 
some specific exceptions to that particular principle, and we take the 
stand against bringing pressure on countries,—and there are nations 
of that sort, where pressure is being brought against them for trying 
within their own boundaries to produce a smelting industry. 

Now, I won’t carry this thing much further. This entire argument, 
this attempt to make a policy is based on national self-interest, but 
self-interest, it seems to us, is really a broad and enlightening thing. 
In other words, what is best for the world is ultimately best for our¬ 
selves, and conservation of the use of the world’s mineral resources 
requires the common application of some of these principles,_if not 


26 




indeed all of them. Lack of application of these principles, on the 
other hand, a departure from these principles, the ignoring of some of 
these fundamental facts, makes friction and the development of un¬ 
necessary bad feeling. Friction through ignorance goes out if every 
person around this table and those in an equivalent position in England 
could realize these few fundamental facts about trade channels, and 
there would be a lot less talk about tariffs, about embargoes of various 
sorts which are now going on in these various countries. 

Now, these principles have all been set forward in fundamental 
form, and this declaration of principles is being followed up by the 
presentation of specific facts back of all of these principles, and they 
have been considered with reference to specific situations all over the 
world. The question may naturally arise as to what is the right line 
of approach to this subject in order to get results, because, after all, 
what we are after is results. We don’t want to go on talking in-^ 
definitely all over the country. We would like to see a little quicker 
action, because some of these problems are acute, and our thought is 
that immediate recognition of these few fundamental facts of distribu¬ 
tion and the few principles that arise out of that on the part of our 
lawmakers, will help a great deal towards solving some of the diffi¬ 
culties confronting us. Without such a recognition of these funda¬ 
mental facts and principles, our international negotiations are likely to 
consist of a series of negatives. I think it is specifically applicable in 
connection with certain discussions going on in the last few months 
in the recasting of the form of certain agreements. In fact, some steps 
have been taken in that direction already. Just an illustration of what 
I mean. Some of the preliminary understandings with England with 
reference to the Messopotamia oil situation consisted of a series of 
articles, and every one of those articles was a negative declaration. 
They all said: “We shan’t do so and so” and “they shan’t do so and 
so.” We suggest the getting up of an affirmative program, taking into 
consideration these few simple facts of distribution—an affirmative 
agreement that these channels of distribution shall be kept open, and 
the rest of them, and then a great many of the negatives and the un¬ 
certainties which we are facing today will have disappeared. 

THE CHAIRMAN: These gentlemen have rendered a very valued 
service to the Government. They were in the Government service 
during the war. One of them is continuously in the Government 
service, and controlled the distribution of minerals for war purposes. 
I think it is quite obvious to all of us that there is just as much need 
of planning for peace purposes as for war purposes, not only for the 

27 


purposes of peace, but for the purposes of possible future wars. We 
have reached the stage in our national development where planning 
must become the order of the day. We have just recently begun to 
plan for the orderly development of our rural life. We have made 
great headway in that planning. I think it is true that we have devel¬ 
oped more legislation of a helpful nature and more activities to aid 
farmers in making their farming profitable and in making rural life 
attractive and helpful and healthful than any other two nations in the 
world. 

They have suggested a new field to us, and it is equally clear that 
there should be planning there also; planning as to the conservation 
and utilization of our own resources, and it is quite obvious that there 
is equal need of international planning. 

One of the more recent things of our national life also is the use 
of experts. I can remember only a few years ago there was much 
talk of the Government’s using experts, of the industries’ using experts. 
One of the outstanding things today is the increasing use of experts by 
industry and by the Government. I hope the Government will expand 
that use, and will be guided in this important technical development by 
men who know something about it, and will follow their lead. 


28 




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